Financing tips for purchasing a used or pre owned vehicle

Posted: Dec 27, 2017 05:42 PM EST

Updated: Dec 27, 2017 05:42 PM EST

There are many lenders out there that offer non-traditional auto loans and other types of loans that can be used for the purchase of used cars. Buy directly from the owner can save you thousands of dollars, but if you do not have the funds, you will need financing and this is why car loans can provide the help you need.

Car Loans for Used Cars

Obtain financing for the purchase of a used car can be difficult, most lenders do not like the idea due to the high risk involved in this type of transaction. The value of the car depreciates rapidly if it is a new car and therefore, if used as collateral, which do not serve the purpose. This is the reason why some traditional lenders offer loans for buying cars, but with shorter repayment programs to prevent the depreciation value of the vehicle.

However, there are non-traditional lenders willing to make loans secured and unsecured loans for the purchase of car, in exchange for an interest rate slightly higher provide the necessary funds to purchase a used car from the previous owner and adapt the loan to meet your needs. You will be able to get a higher loan amount, longer repayment programs, lower monthly payments, etc.

Alternative Sources of Funding

An interesting alternative to finance an employee or even buy a new vehicle is the use of home equity loans. It may seem strange, but the truth is that the mortgage is a very interesting source of funds, as it allows very favorable interest rates on loans, lower payments for sums higher monthly low of loans and programs flexible payment.

With a home equity loan you will not have trouble finding the loan you need, as collateral for the loan is the same car, but the remaining equity in your home. Equity is the difference between the value of your property and debt that is guaranteed by it.

Advantages of This Method

Because of the risk of loans through less equity loans represent, you will be able to get money with an interest rate that can be half of the rate charged usually auto loans. Also, since you can get a loan with amortization up to 15 years. You will be able to get lower monthly payments; you will be able to pay without having to make sacrifices.

The use of capital for the purchase of car may not be the traditional way, but it certainly has many advantages and is especially useful when you want to buy a used car that usually has more complications in terms of funding. However, keep in mind that a home equity loan if you cannot repay the loan that can support the recovery of the property.